People with disabilities can use an Achieving a Better Life Experience (ABLE) account to help pay qualified disability-related expenses. Here are some things to know about ABLE accounts:
- This tax-advantaged savings account doesn’t affect their eligibility for government assistance programs.
- The 2022 annual contribution limit is $16,000.
- ABLE account-designated beneficiaries may be eligible to claim the saver’s credit for a percentage of their contributions.
- Eligible beneficiaries must be 18 years old at the close of the taxable year, are not dependent or full-time students, and meet the income requirements.
- Families may roll over funds from a 529 plan to another family member’s ABLE account.
- Disability-related expenses include housing, education, transportation, health, prevention and wellness, employment training and support, assistive technology, and personal support services.
* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov7
Footnotes and Sources
- IRS.gov, July 20, 2022
